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Countries With The Most External Debt in 2017

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Here is the list of countries that owe the most to foreign creditors in 2017. The United States leads, followed by the Euro area and the United Kingdom.

November 28, 2017

Having high external debt can fast become an economic crisis for a country. If financial markets consider that the country's ability to pay back its debt is not sufficient or too uncertain, it will find further borrowings to be be impossible or extremely expensive. Eventually, the economy may find itself strangled by a lack of credit.

External debt (also called “foreign debt”) is the portion of total country debt that is owed to creditors outside of the country. The debtors can be the government, corporations or private households. The creditors include private commercial banks, other governments and international financial institutions (such as the IMF and the World Bank).

A sustainable external debt, therefore, would be one that allowed the country to service its obligations in full without accumulating any arrears, having recourse to rescheduling or to debt cancellation, while allowing for an acceptable level of economic growth. To help low income countries attain this goal, the IMF and the World Bank created the Debt Sustainability Framework in 2005 to periodically assess the situation and provide recommendations to address any potential risks.

The most commonly used indicator to express and compare external debt is the Gross External Debt. The IMF, the BIS, the OECD and the World Bank share a common definition for it as “the outstanding amount of actual, current, and not contingent, liabilities that require payment(s) of interest and/or principal by the debtor at some point(s) in the future and that are owed to nonresidents by residents of an economy”.

Note that the definition refers to residency and not to nationality, and that the indicator includes both principal and interest of the debt. The loans included in external debt have to be repaid in the currency in which they were signed, which for most countries is a foreign currency. If that is the case, to be able to repay the debt, the country may produce and sell goods or services to buyers who pay in that foreign currency, use their foreign currency reserves or recur to new credit.

The last review was conducted in 2012 and a new one is ongoing and to be discussed by the IMF and WB boards this summer.

Countries with the most external debt

Country Name

Extwernal debt in 2016, last trimestre (USD millions)

United States

18,325,489

Euro area

14,292,310

United Kingdom

7,486,249

France

4,991,533

Germany

4,891,076

Netherlands

3,865,914

Luxembourg

3,845,300

Japan

3,416,122

Italy

2,215,150

Ireland

2,185,535

Spain

1,966,282

Canada

1,743,183

Switzerland

1,691,213

China

1,420,657

Australia

1,397,821

Hong Kong SAR, China

1,330,055

Singapore

1,283,526

Belgium

1,176,358

Sweden

853,841

Brazil

671,647

Austria

616,435

Norway

608,729

Russian Federation

513,478

Denmark

495,338

India

456,066

Greece

455,785

Finland

442,698

Portugal

420,428

Mexico

411,507

Turkey

404,182

Korea, Rep.

380,949

Poland

335,941

Indonesia

316,968

Malaysia

202,550

Argentina

192,462

Mauritius

185,370

New Zealand

181,954

Chile

163,789

Kazakhstan

163,758

Hungary

143,744

South Africa

142,833

Czech Republic

137,606

Thailand

131,362

Colombia

120,010

Ukraine

113,483

Cyprus

112,696

Romania

97,374

Malta

91,690

Israel

91,081

Slovak Republic

77,740

Philippines

74,763

Peru

69,609

Egypt, Arab Rep.

67,323

Morocco

47,549

Sri Lanka

46,586

Slovenia

45,678

Croatia

43,916

Latvia

38,847

Belarus

37,567

Bulgaria

37,338

Lithuania

35,173

Ecuador

34,161

Tunisia

28,464

Jordan

27,083

Costa Rica

26,437

Uruguay

26,148

Iceland

25,024

Estonia

20,070

El Salvador

16,253

Georgia

15,496

Armenia

9,952

Kyrgyz Republic

7,867

Macedonia, FYR

7,646

Moldova

6,595

Seychelles

3,103

West Bank and Gaza

1,749

Countries With The Most External Debt in 2015

October 11, 2015

The International Monetary Fund (IMF) defines external debt as the outstanding amount of actual, current, and not contingent, liabilities that require payment(s) of interest and/or principal by the debtor at some point(s) in the future and that are owed to nonresidents by residents of an economy (determined by where one is located, not one’s nationality). The debt includes both principal and interest payments due.

For some countries, particularly developing ones, debt incurred by governments can exceed those governments’ ability to pay (based on tax revenues and on the nation’s gross domestic product). Government funds spent on poverty reduction, job creation, infrastructure improvement, education and the like, foster longer-term growth, possibly leading to lower levels of borrowing in the future. However, the burden of loan repayments can make these beneficial expenditures impossible. In addition, sometimes the debts were incurred by regimes that are no longer in power, but the burden to pay down the loan falls to a subsequent administration. Loans are sometimes restructured, allowing longer time-periods for repayment. And debt cancellation for developing nations is a topic that is hotly debated.​